S&P downgrades US banks due to growing liquidity problems

S&P Global joined on monday Moody’s by cutting the credit rating and prospects of several US regional banksstating that the increase in financing costs and the problems of the commercial real estate they will probably test its robustness.

The incessant interest rate hike campaign of the Federal Reserve in the United States has raised deposit costs for banks, which have been forced to pay higher interest rates to prevent clients from fleeing to other high-yield alternatives.

S&P cut the ratings of Associated Banc-Corp and Valley National Bancorp for funding risks and increased reliance on intermediated deposits, while UMB Financial Corp, Comerica Bank and KeyCorp were downgraded for large deposit outflows and rates higher predominant.

Shares of KeyCorp and Comerica were each down nearly 1% in pre-opening trading.

S&P cut the outlook for S&T Bank and River City Bank from “stable” to “negative,” citing higher commercial property exposure (CRE).

The measure of the agency will increase the indebtedness of the weakened banking sectorwhich is trying to shake off the effects of the crisis at the beginning of the year, when the bankruptcy of Silicon Valley Bank and Signature Bank triggered a loss of confidence and caused a massive withdrawal of deposits in several regional entities.

Borrowing costs around the world have also skyrocketed and government bond yields us treasury They hit their highest level in 16 years on Tuesday as the slide in fixed income markets entered its sixth week, despite US stock index futures rising, led by large-cap growth stocks.

The rating agency’s action came weeks after similar downgrades by its peer Moody’swhich earlier this month downgraded 10 US banks and placed six, including Bank of New York Mellon, US Bancorp, State Street and Truist Financial, on review for possible downgrades.

an analyst of fitchthe last of the three major ratings agencies, also told CNBC last week that several US banks, including JPMorgan Chase, could see their ratings downgraded if the sector’s “operating environment” deteriorated further.